British Gas owner Centrica sees record profits of £3.3bn as energy bills rise

Centrica said it made operating profits of £72m at its British Gas retail division, British Gas Energy, but this was down 39 per cent on the year before

Rich Booth,Matt Mathers
Thursday 16 February 2023 15:30 GMT
Rishi Sunak denies his windfall tax package is 'un-conservative'

British Gas owner Centrica recorded profits of more than £3bn last year as it became the latest energy giant to post a bumper windfall from soaring prices fuelled by Vladimir Putin’s illegal war in Ukraine.

The UK-based firm’s full profits for 2022 more than tripled from the £948m recorded last year, prompting fresh calls by opposition parties, unions and climate campaigners for the government to introduce a “proper” windfall tax.

The government has introduced a levy on the profits of oil and gas firms but they can reduce the amount they pay by investing more in oil and gas extraction from the North Sea.

Centrica said it made operating profits of £72mn at its British Gas retail division, British Gas Energy, but this was down 39 per cent on the year before.

The figures come after a report revealed Centrica’s use of debt collectors to install expensive pre-payment meters by force in the homes of vulnerable cash-strapped customers.

The scandal sparked an urgent inquiry by regulator Ofgem and has seen Centrica agree to stop force-fitting pre-payment meters.

In the figures, Centrica said it was “extremely disappointed” by the report.

“We immediately took action to address this and are completing a thorough independent investigation,” it added.

Gas prices have pushed up energy bills over the last two years

Sharon Graham, general secretary of the Unite union, said the profits showed “everything that is wrong with the UK’s broken economy”.

She called on Rishi Sunak, the prime minister, to impose a “meaningful” windfall tax on the profits of oil and gas giants.

Ms Graham said: “British Gas owner Centrica has been coining it in from our massive energy bills while sending bailiffs to prey on vulnerable consumers the length and breadth of the country.

“These energy companies are showing us everything that is wrong with the UK’s broken economy.

"Rishi Sunak should get a grip – pull the plug on rampaging energy profiteering, impose a meaningful, tough windfall tax and give the NHS a pay rise with the proceeds.”

Shadow climate change secretary Ed Miliband Ed Miliband during the Labour Party conference at the ACC Liverpool

Andrew Simms of the Rapid Transition Alliance said: “Given energy markets are mature, from an economic point of view profits on this scale only occur as a result of market failure.

“The profits do not result from any great business skill, but are a virtually untaxed windfall, a type of profiteering from global events, and because fossil fuel companies are not paying for the environmental and health damage caused by their product.”

Centrica said it paid nearly £1bn in tax relating to 2022 profits.

But it also revealed it handed out bumper returns to shareholders, with plans to boost its share buyback programme by another £300m and paying out a full-year dividend of 3p a share.

Shadow climate secretary Ed Miliband criticised the government’s handling of sky-high gas and electricity bills and promised that Labour would introduce a “proper” windfall tax on energy companies.

“It cannot be right that, as oil and gas giants rake in the windfalls of war, Rishi Sunak’s Conservatives refuse to implement a proper windfall tax that would make them pay their fair share,” Mr Miliband tweeted.

“Labour would use a real windfall tax to stop the energy price cap going up in April.”

Sana Yusuf, a climate campaigner at Friends of the Earth, called on the government to take tougher action on a windfall tax after the latest Centrica profits.

“Another set of bumper profits from one of the companies fuelling the energy and climate crises will no doubt spark further outrage as millions of people struggle to pay their bills and face a drop in Government support from April.

“The new Energy Security And Net Zero Secretary needs to step up and back growing calls for a tougher windfall tax on the excessive profits of fossil fuel companies like Centrica to help fund the investment in insulation and homegrown renewables needed to bring down bills and cut emissions.”

Earlier this month Shell recorded the highest profit in its 115-year history as it benefited from soaring oil prices driven by Russia’s invasion of Ukraine.

Profits increased by 53 per cent to £68.1bn in 2022, while earnings adjusted for taxes doubled to £32.2bn.

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